Chongqing and Guang­dong roar ahead in rank­ings

China Daily (Hong Kong) - - BUSINESS - By WANG YANFEI wangyan­fei@chi­nadaily.com.cn

Ex­port-ori­ented prov­inces and mu­nic­i­pal­i­ties sus­tained high-speed growth in the first half, while re­gions re­ly­ing on smoke­stack in­dus­tries, though still lag­ging be­hind, have grad­u­ally gath­ered pace as eco­nomic struc­tures im­proved.

Chongqing reg­is­tered 10.5 per­cent year-on-year growth in the first six months, top among 25 of the 31 prov­inces, au­ton­o­mous re­gions and mu­nic­i­pal­i­ties to have re­leased of­fi­cial eco­nomic data as of Wed­nes­day.

The south­west­ern me­trop­o­lis’ growth was 3.6 per­cent­age points higher than the na­tion’s over­all fig­ure of 6.9 per­cent for the first half of this year.

In terms of eco­nomic out­put, Guang­dong prov­ince ranked top with a to­tal of 4.2 trillion yuan ($617 bil­lion) in gross do­mes­tic out­put in the first half.

These two re­gions are in the driv­ing seat thanks to their di­verse busi­ness struc­tures which rely lit­tle on tra­di­tional in­dus­tries, said Gao Huiqing, head of the de­vel­op­ment re­search de­part­ment of the State In­for­ma­tion Cen­ter.

A re­cov­ery in global de­mand has also helped the two ex­por­to­ri­ented re­gions to en­joy sus­tained rapid growth, he said.

Michael En­right, an eco­nomics pro­fes­sor at the Univer­sity of Hong Kong, said Chongqing’s high-speed growth is re­lated to cen­tral gov­ern­ment’s sup­port such as the Belt and the Road Ini­tia­tive and poli­cies at­tract­ing for­eign in­vestors.

“For­eign in­vest­ment helps Chongqing stand out among other in­land cities,” said En­right, cit­ing the ex­am­ple of how it be­came the largest lap­top man­u­fac­tur­ing base in Asia in only around 10 years, as a large amount of for­eign in­vest­ment has poured in.

He said he ex­pected that Chongqing and other cities with free trade zones, such as Shang­hai and Tian­jin, will con­tinue to wit­ness sus­tained growth, be­cause the gov­ern­ment will boost the do­mes­tic econ­omy through fur­ther open­ing up and at­tract­ing for­eign in­vest­ment.

In con­trast, re­gions which re­lied on tra­di­tional in­dus­tries still lagged be­hind.

North­east­ern Liaon­ing prov­ince only wit­nessed 2.1 per­cent year-on-year growth in the first half, while other old in­dus­trial bases, such as Hei­long jiang prov­ince and the In­ner Mon­go­lia au­ton­o­mous re­gion, were among the six prov­inces and re­gions that have yet to re­lease data.

Li Luoli, deputy head of the China De­vel­op­ment In­sti­tute, a Shen­zhen-based think tank, said these ar­eas need to speed up the pace of find­ing new growth en­gines.

“The tough­est time of eco­nomic tran­si­tion may have passed, but there are many chal­lenges that have yet to be re­solved,” he said, re­fer­ring to is­sues such as the re­lo­ca­tion of laid-off work­ers.

He said it would take a con­sid­er­able pe­riod to see a new gen­er­a­tion of in­dus­tries takes shape.

“Some ma­jor coal and steel pro­duc­ers have achieved progress in eco­nomic tran­si­tion,” said Zhao Chenxin, head of the eco­nomic op­er­a­tion bureau of the Na­tional De­vel­op­ment and Re­form Com­mis­sion, cit­ing the ex­am­ple of a com­pany lo­cated in Shanxi prov­ince, China’s ma­jor coal pro­ducer.

The earn­ings of Shanxi Yang­mei Group im­proved as it de­vel­oped new pro­duc­tion tech­nol­ogy and ex­panded busi­ness such as coal trans­porta­tion and stor­age, he said.

Shanxi prov­ince wit­nessed bet­ter-than-ex­pected growth in the first six months with 6.9 per­cent year-on-year growth, ac­cord­ing to Zhang Xiaodong, deputy head of the prov­ince’s statis­tics bureau.

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